The TGNPDCL and TGSPDCL must file the ARR before the TGERC by the end of this month so that the ERC can decide on the tariff by the end of March.

Hyderabad: Following the Telangana State Electricity Regulatory Commission (TGERC) imposing a fine of Rs. 1.5 crore on state-run power distribution companies for not submitting the requirement report in annual revenue (ARR) on time last time (2024-25), the two distribution companies have reportedly started preparing the ARR report for the next financial year (2025-26), so that it can be submitted on time.

The Northern Power Distribution Company of Telangana Limited (TGNPDCL) and Southern Power Distribution Company of Telangana Limited(TGSPDCL) are required to file the ARR with the Telangana State Electricity Regulatory Commission (TGERC) by the end of this month so that the ERC can decide on the tariff by the end of March.

The ERC recently issued orders for the ARR submitted by the two DISCOMs for the current financial year. Since the ARR would be valid only for the next five months, power utilities have started preparing a new ARR for the financial year 2025-26.

However, filing the ARR report with the TGERC for the next financial year would be a tightrope walk for the power distribution companies, given that local elections are expected to be held in January or February. The government is unlikely to authorize the ARR report. to be submitted to the ERC with proposals for revising electricity tariffs.

In the last financial year (2023-24), the South and North DISCOMs incurred losses of Rs. 4,909.53 crore and Rs. 1,835.22 crore respectively, and officials estimate that there will be a deficit of up to Rs. 10,000 crore in the current financial year between revenue and expenditure of discoms.

In the RR, DISCOMs must provide details of the expenditure they have to incur for purchase of electricity, for maintenance of distribution and transmission systems, salaries of employees, interest payable to banks, on the loans contracted. and others.

The Commission reviews proposals, holds public hearings and determines the rate to be charged on the sale of electricity. The activity begins in November and ends in March. The new tariff order comes into force on April 1 of the following year.

DISCOMs benefit from a tariff subsidy from the government for free electricity to farmers. They also receive revenue from ministries for the electricity they provide. In order to pay the amounts to the power generation companies, the DISCOMs have to realize the amounts from the sale of electricity to consumers, ministries and government subsidies.